Wahab quits as SHC bars KMC taxation via KE bills

Jamal Khurshid & Oonib Azam
Tuesday, Sep 27, 2022

KARACHI: After the Sindh High Court (SHC) restrained on Monday the Karachi Metropolitan Corporation (KMC) from collecting municipal taxes through electricity bills, Barrister Murtaza Wahab resigned from the post of the KMC administrator.

The SHC restrained the K-Electric from collecting the amount of municipal utility charges and taxes (MUCT) on behalf of the KMC through its electricity bills from the consumers. The interim order came on a petition of Syed Najeebuddin Ahmad who challenged the collection of fire and conservancy charges and other utility charges of KMC through KE bills.

During the hearing, SHC division bench, headed by Justice Syed Hasan Azhar Rizvi, asked KMC Administrator Murtaza Wahab, who appeared before the court to represent the KMC, about the justification of collecting municipal utility charges and taxes through electricity bills, adding that the people had resentment against the KE over its performance and recently garbage was being dumped on their vehicles.

The court observed the government and the KE had also been involved in litigation over recovery of arrears, asking what would be the fate of such recovered money? The court asked the KMC administrator as to what was the status of property and motor vehicle taxes being collected by the provincial government and which authority was collecting taxes on advertisement of banks on local shops, and if any data is available with regard to such collection?

The court also questioned legal authority of collecting MUCT, asking which development works had been done on the basis of such tax collection? The court observed that the provincial government was also collecting huge taxes from Karachi, but when it comes to facilities being provided to citizens, its seems as though they were being given a charity.

The court observed that the city’s infrastructure had been damaged, roads were in dilapidated conditions with non-functional street lights while the citizens were being robbed and left at the mercy of dacoits.

The court observed that the provincial government was already recovering different taxes/charges including property tax and motor vehicle tax from the residents of Karachi, asking what was the justification of levy of MUCT and its collection through KE bills?

KMC Administrator Murtaza Wahab submitted that the municipal utility charges and taxes had been imposed under section 100 of the Sindh Local Government Act 2013. He submitted that MUCT recovery was not new as previously the same was being collected through third party, and he also referred an agreement between the KMC and M/s Sprint express. However, proper recovery was not made, therefore, the KMC has now assigned the task of recovery of MUCT through the KE, he added.

Wahab referred to a resolution showing the schedule of payment of MUCT ranging from Rs50 to Rs200 per month and contended that the amount collected would be utilised for the city’s development.

The KMC administrator sought time to assist the court by placing on record all material relating to MUCT collection and its utilisation, and requested the court not to pass any interim order till the next date as it would affect the system because the city was in urgent need of funds for its development.

The court, however, turned down the request observing that the KMC was free to collect its taxes, but the same could not be collected through electricity bills. The court restrained the KE from collecting amount of municipal utility charges and taxes of KMC through its electricity bills.

The court directed all the parties to file their respective replies along with relevant documents on or before the next date of hearing. The petitioner had questioned the viability of collection of utility taxes through the KE bills and requested the court to declare the impugned action of the KMC as unlawful. He requested the court to declare that the mechanism for recovery of municipal taxes be made effective and efficient rather than hiring services of the KE.

Later, in his resignation letter tendered to the Sindh chief minister on Monday, Wahab said he tried to alleviate grim financial situation of the KMC to make it a viable organisation. “We have achieved much and I am pleased to state that service delivery of the KMC has improved,” he said. “However, I regrettably submit that I am unable to continue any further as KMC administrator due to personal reasons. Hence, I tender my resignation from the post of administrator.”

Adressing a press conference in Sindh Assembly Committee Room, Murtaza Wahab said the decision of the improvement of the city should not be in the hands of only 50 or 60 people. “I believe in ethics. My ethics don’t allow me to stay as KMC administrator any more. I was working with sincerity for the betterment of the city, I am grateful to my party for giving me so much respect, I don’t care if a handful of people change the decision taken under the law. This is my city, the decision of collecting municipal utility tax in a new way was not taken by my party, but it was mine and approved by the Sindh cabinet,” Wahab said.

Murtaza Wahab expressed disappointment over the court decision to stop the KMC from collecting municipal utility tax through K-Electric and said it was no longer possible for him to run the city after the court decision. He said he wanted to make the process of tax collection transparent so that the money should go directly to the KMC instead of going into someone’s pocket. “Before me, Mustafa Kamal and Waseem Akhtar had been collecting this tax through a private company. It would have been easy for me to continue the process and appoint my blue-eyed people for tax collection, but I took the decision knowing the interest of the KMC and the citizens of Karachi,” he said.

Wahab said it was sad that the implementation of the municipal utility tax was considered valid by the court but its collection by KE was halted. He said those who criticise him didn’t want improvement of the city.

Murtaza Wahab said the KMC did not get its dues for nine years and he fought its case before the KPT. As a result, the KPT paid the KMC Rs230 million, he added. “I still believe that the decision to collect municipal utility tax through KE was the right one,” he remarked.

Wahab claimed that the KMC could get Rs3 billion per year instead of Rs160 million after collection of municipality tax. He said this money would directly go into KMC account, not in someone’s pocket. He said it was decided that a body like KMC should do the city’s work through its own resources. He said the solution to everything is in the law and the law says that KMC can levy this tax. He said any mayor after the local bodies elections would have money to spend on the city. He said earlier, this tax was up Rs5,000 and now it was reduced to Rs50 and Rs200. He said no one ever asked why PTV Rs100 licence fee was collected through electricity bills.

“I believe in the supremacy of the law and there is nothing above the law. I have explained all details in the court,” he added. Murtaza Wahab said different mayors in the past had done many irregularities, adding that he performed his duties with utmost honesty and integrity.

“I have come to the conclusion that it is not easy to do public service work in this city. I am committed to my party discipline and will continue to respect their decisions. Now someone better than me will come and work here,” he added.

KE outstanding dues against KMC: In another matter with regard to discontinuation of electricity supply to Abbasi Shaheed Hospital’s staff colony, the KE submitted that the KE outstanding dues against the KMC are piled up to Rs102,898,561 till February 2022.

The KE counsel submitted that 346 electricity connections were installed on various premises of KMC and amount of Rs1180,000,000 was outstanding till January 2022. The KE counsel submitted that the KMC also failed to furnish complete details of residents and colonies in light of the Supreme Court order. The court, after taking the report on record, adjourned the hearing till October 13.